Charles Lawton: Data point to Portland as a tale of two cities

Last week I spoke about the importance of deriving meaning from data. Today I’ll try to put my money where my mouth is, using Portland’s “Economic Scorecard for 2012-13” as the data source.

The scorecard assembled data for 32 indicators and scored each as exceeding, meeting or lagging its goal. For 11 indicators Portland (or the region) was “exceeding” the stated goal, for five indicators the city or region was “keeping up,” and for 16 the judgment was “lagging.”

In seeking to explain these results, several explanations emerge, some quite obvious, others more subtle.

Population growth appears simply to be a question of distribution — the city is lagging its national benchmark while the region is exceeding its benchmark. Move some people around (or expand city boundaries) and we’ll be right on target. This set of indicators speaks to the continuing effects of sprawl and the need to attend to the issues of land-use planning and housing prices.

This conclusion is supported by the fact that in both housing and rental affordability we are lagging our national benchmarks.

Another rather straightforward conclusion is that certain business sectors are simply doing better than others.

Employment growth in life sciences, information technology and business and financial services lags the U.S. average, while in arts, entertainment, recreation and visitor services our employment growth exceeds the U.S. average.

We’re apparently “the way life ought to be” for those at play but not so much for those trying to solve technical problems.

Similarly, regional retail sales and growth in total metro production exceeded their national benchmarks while city exports and imports per capita were lagging our goals.

Again, in some areas we were strong while in others not so much. This then raises the policy questions, “How important is sector X compared to sector Y?” and “What are our relative priorities?”

Consideration of the employment, education and income data is far more perplexing.

Why, for instance, are the city and regional unemployment rates lower than their national benchmarks, the city and regional educational attainment levels higher than their national benchmarks, while private-sector and total employment growth rates lag behind their national benchmarks?

The answers, I suspect — though the data in the scorecard can’t prove it one way or another — lies in our demographic structure.

Much of the region’s population growth derives from retired or near-retirement immigrants.

The most recent interstate migration figures from the U.S. Census Bureau indicate that 33,818 Maine residents in 2011 lived in a different state in 2010. Many of these new arrivals bring advanced degrees and accumulated sources of non-employment-based income. Their arrival, therefore, helps explain the above-average population growth, the above-average income, and — since many are not part of the labor force — both the below-average unemployment rate and the lagging job growth.

If this hypothesis is in fact true, the data point all the more clearly to the need to focus policy efforts on education and the labor force.

Rather than being lulled by our overall levels of educational attainment, we need to focus more clearly on the educational attainment of those entering the labor market and on the volume of new business formation. Here the data are either silent — there is no measure of business formation, or indirect — we are keeping up in science and engineering occupations, but lagging in venture funding and number of patents issued.

In sum, the central meaning I take from the scorecard is twofold.

The first is that the Portland region is a wonderful place to live for those with the financial and human capital to enjoy it. These people contribute significantly to our income level, retail sales and arts and entertainment sectors, and we ought to do all we can both to attract more of them and to engage their skills and capital in our community development efforts.

Second, however, the Portland region is less successful in providing gateways to these amenities for the young and less occupationally prepared.

I see, therefore, two policy recommendations flowing from the scorecard: first, increase the interaction between business and educational enterprises and second, teach and encourage all manner of entrepreneurial activity.

Charles Lawton is chief economist for Planning Decisions, Inc. He can be reached at:

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